Even a not-really-hostile-goverment-but-more-like-incompetent can do a lot of damage by debasing the currency. Now the citizens have tools to fight their incompetence.
If only for this reason, is better to have crypto than not have it. I can came up for a lot of reasons why I think Tik-Tok is useless, but is useful for a lot of people, so no reason for me to to bash it.
How? Nobody needs cryptocurrency to pay their bills and statistically nobody uses it - many, like Bitcoin, are designed to discourage regular usage – so all the government has to do is control exchange points in the local economy. Until you can pay taxes or rent, buy groceries, etc. that gives the government more control than they get with cash.
Since cryptocurrencies provide a full irrepudiable audit trail, that also makes it extremely risky to try to skirt local regulations since any attempt to do a transaction under the table has an inherent risk that the other party, willingly or not, is or ever will be giving data to to government. Since we’re talking about systems which have spent many years failing to be capable or desirable for routine use even in countries which don’t have strict rules limiting use, it seems unlikely that this would provide any significant protection in a more repressive regime.
The other thing you have to remember is that the quasi-religious desire for deflationary behavior from cryptocurrency proponents isn’t what most people want. Deflation causes economic contraction and favors rich asset holders who have reliable revenue streams – unless that’s you, the modest inflation targeted by most central banks is a much better deal.
How? If your government decides to take your stuff, they’re not going to say “some nerds in another country said no, guess we have to let them keep it” - they’re just going to fine, jail, or abuse you until you turn over the keys (better hope you can convince them you didn’t have anything more which you aren’t still concealing). Blockchains helpfully give them your full transaction history so it becomes exceptionally dangerous to engage in transactions with anyone you know in country since you don’t know whether they are or will ever be giving that data to the authorities.
The underlying problem is the repressive government. This is not a technical problem and you’re not going to be able to solve it with a complex, easily tracked technology which preserves a full history of your non-compliance for prosecution.